Baseball is always a fecund place to find analogies about life. It’s also a great place to find analogies about life that apply to payments.
Here’s one: “Never make predictions, especially about the future.” That one’s been attributed, of course, to Yogi Berra, as well as Hall of Famer Casey Stengel.
And yet, we do all get into the predictions game, in every walk of life, across industries and personal endeavors, serving as roadmaps for the upcoming 12 months and beyond. What we believe helps shape what we will do.
In the latest installment of Topic TBD, Poynt CEO Osama Bedier and Karen Webster debated what may take shape in payments and eCommerce in the year ahead, with repercussions beyond.
A Look Back
Looking back at 2016, Bedier started the conversation about his year-end 2015 predictions with the qualifier: “It’s been easier to predict what will happen as opposed to when it will happen. Predicting when consumers will do things at scale is near impossible.”
What wasn’t hard, he said, was predicting the importance of smart devices and terminals.
“Smart devices — and smart terminals in particular — are being seen as a necessity. A few years ago, when [Poynt] launched, we were trying to convince people why they needed a terminal to connect to the internet and download an app … and [now], almost every major acquirer in the country is looking at their smart terminal strategy, and I’m glad to see that finally happening.”
Omnichannel is also another area that came of age — or at least into adolescence — in 2016.
People did not really understand what omnichannel was, said Bedier about the world a few years back. Making all of the shopping channels work as a single experience or one channel delivering multiple ways with one view of the customer, he believes, is coming to fruition. And Bedier went out on a limb and said that retailers who adopt omnichannel faster can get a bigger slice of the revenue pie in the future.
A Look Forward
A prediction that Bedier remains excited about is the emergence of an ISV that meshes POS and acquiring. The end result, he offered, is the pricing and transparency of Square, with embedded apps focused on specific retail verticals, such as salons or fitness centers, for example.
“Call it ISV 2.0, but selling commodity acquiring will increasingly be very difficult,” said Bedier. “Value added services, the best of which are fully integrated solutions, even for the smallest guys, will start winning in a big way.”
As for other predictions, Bedier posited that the lines blurring in commerce means that the infrastructure used for eCommerce will become the infrastructure used for all commerce, including in-store. “The only way to deliver a true omnichannel experience is to use all the technology we learned in the web and mobile age and to use it for the store,” he said.
Treating them as separate channels “where the two systems don’t talk” sets up a competitive disadvantage against firms such as Apple that bring their entire commerce experience across one infrastructure, he said.
Bedier stated that the “endless experience” of navigating online and offline aisles for customers will eventually come to an end. For the consumer, the expectation will be that “anything that is not available in a store … can be shipped to their home in the right size or a different color.”
As for eCommerce itself, continued Bedier, mobile will take majority share over desktop across several segments, he said. The question will remain, he said, how much of online commerce will, in fact, remain to be conducted over desktop. “Four or five years from now, I believe we end up with about 5 percent,” he predicted.
The bigger online retailers, such as eBay and Amazon, will see the mobile conduit and usage pass 50 percent, he said. Against that backdrop, he said, order ahead and other mobile commerce initiatives become necessities for smaller players — with an eye on mobile strategy overall and not just overall mobile app strategies. “A mobile-first strategy is critical next year,” said Bedier, and if not embraced, a few years out, in-store sales will drop precipitously to the point that some businesses must shutter.
The app world versus the web world, said Bedier, is likely to be less of a battle than an arena where things will start to blend, he added. “I view next year as a watershed year … where there is something that is not an app and it is not a webpage. It is something that is in the middle. You do not have to actually discover it, find it and download it.” Imagine, he said, using Uber, but without the app, as the operating system downloads an applet automatically, with the ability to finish the transaction. The ecosystems with the least friction, he said, will come to capture the most consumer interaction (and transactions).
Building on that somewhat automated functionality, the “idea of advertising requiring the end step being an order and not a link and a referral” will come to fruition next year. Thus, another prediction: the emergence of performance-based advertising (where the performance is an actual order). Though push methods may never be fully optimized, he offered, a number of factors are coming into play to help improve efficiency in retail targeting efforts, along with voice search, location technologies and, of course, expanded consumer choice that extends across pickup in-store to shipping to other options.
As for the in-store experience, the concept and use of the actual physical location is changing, agreed Webster and Bedier. The retailing world five decades ago existed on winning through selection and price — the era of the big-box store.
Now, the emergence of eCommerce has brought selection and price to bear on retail without the need for the same sort of physical store scale (including supply chain scale) built by Walmart.
“You don’t have to have warehouses … or stores, or even to buy the items. You just had to have access to them,” he said. With those advantages in place versus traditional retailing, said Bedier, “you could always give a better price.” But the fact that there was (and is) no physical proximity to the customer means that something must fill that hole — in this case, personalization.
To gain personalization, he noted, data is a necessity, and data is plentiful enough so that, in the next year, predicted Bedier, some companies will become quite adept at predicting consumers’ next purchases.
The end result? Bedier said that a great consumer experience, on top of selection and price, will win.
“You have to be a technology company to be in retailing in the future,” Bedier emphasized.